Many homeowners are either in the process of refinancing their mortgage or thinking about it. The mortgage rates are lower than what people currently have so they want to take this opportunity to refinance. Believe it or not, you are able to refinance your mortgage fairly quickly even if you recently purchased a home or you recently refinanced. For some, you can refinance without a waiting period and for others you may need to wait six months before you refinance. It is dependent on what type of loan you have.

If you are trying to decide if refinancing is worth it for you, you need to look at the big picture and see how much money you will save in both a monthly and lifetime aspect of the loan. Another good reason to look into refinancing is if your monthly payment would be decreased. That extra monthly money could play a big part in someone’s financial life.

You may not be aware but refinancing does have costs associated with it that is similar to a closing cost – it is usually a percentage of your loan amount. There is not a magical number as far as how many times you can refinance your home, but there may come a time when it does not make sense to continue to refinance. Especially since you likely have to wait six months between closings.

Keep in mind that whenever you refinance, your loan starts over. Unless of course your loan term is shorter than your current loan. Refinancing means that you are creating a brand new loan so your loan length starts over.

Also keep in mind that there is a difference between a cash-out or no-cash-out refinance. If you do a cash-out, you are borrowing from your home equity. So you will actually have to take out a bigger loan than you actually owe in order to get the cash you may need/want.

Refinancing can definitely be a good decision for a homeowner – just make sure you look at all of the different angles that are involved.

If you are unaware, pre approval letters typically come with an expiration date. The expiration date varies as it could be 30, 45, 60, or even 90 days. Although the 90 day expiration is very uncommon, it just depends. With the market being as crazy as it is today, you will want to make sure your pre approval letter is current and you have easy access to it in case you have to jump on making an offer for a home quickly.

It is important and easier to have a current pre approval letter as it is possible for a mortgage rate to make a significant change, particularly an increase, and with the increase, you may not be able to afford a loan so high. Because of the possibility of the quick rise of mortgage rates, the majority of lenders are decreasing the amount of time a pre approval letter lasts. 

Unfortunately you cannot extend a pre approval letter, but you can renew them. Lenders will require documentation to be re-verified upon renewing your pre approval. For example, your most recent pay stubs and bank statements will have to be submitted again. It is possible for things to change within a short period of time, so you can understand why this type of information needs to be submitted again.

The good thing is that there is no limit on how many times you can get pre-approval letters. If you are in the process of house hunting, do not hesitate to ask for a renewal from your lender. The majority of lenders do not charge for a pre-approval letter. If a lender does, they will merely deduct their fee from the closing cost.

Depending on the process a lender uses, your credit score may or may not be affected. It depends if a lender makes a “hard” or “soft” inquiry. A “hard” inquiry affects your credit score while a “soft” inquiry does not.

Having this pre-approval letter will make your house hunting less stressful and perhaps a little easier. This is especially true if you are in a rush to purchase a home and you want to stand out against others.

If you are opening your home to a loved one who is elderly or your elderly family member (or friend) is living alone, there are some things to take into consideration so not only are they safe, but tasks that they need to get done can easily get done. Falling is a huge danger that the elderly have. It is estimated that as many as 5,000 people a year will die shortly after falling. That is a significant number! Keep in mind that there are about 75% fewer fall when someone can be cared for in their own home instead of a facility.

If a room is cluttered, it will be more difficult for someone to get around with a walking aid. Make sure all rooms have a limited amount of furniture and other “stuff.” Also, be careful of any rugs that have the potential to be tripped on. It would be best to remove any extra rugs in the home as well.

When it comes to the bathroom, there is a lot to take into consideration. For the bathtub, rails would be helpful to get in and out of the bathtub. A non-slip mat on the bottom of the tub would also be helpful. If possible, a walk-in shower would be the most conducive and safe. Depending on the size of a person, a toilet may be too low to the ground for comfort and safety. There are options to adapt the seat to make it higher.

When it comes to the kitchen, there is a lot that can be done! Counter tops, drawers, and shelves that are higher up would be easiest for the elderly to reach for. If cooking is still on the table and possible, a talking scale or a scale with big numbers, would be most beneficial. There is also a great deal of kitchen gadgets that can be changed out for older gadgets.

We thought that this information would be important to the ever-growing population of people who care for their elderly family members. If you have any other tips, please share them so others will be able to benefit as well.

There are quite a few reasons that a lender looks at someones bank statement. Mostly, a lender wants to make sure that someone can afford a house downpayment, closing costs, and obviously monthly mortgage payments. Lenders will also look at a bank statement to see if any checks that have been written have bounced due to not having enough funds in your account. It will also look questionable and strange if someone has a significant deposit made into a bank account but the source is not easily able to be found. The opposite is true, too…if a large amount of money is going toward an account that is not clearly listed, questions will be raised.

For the most part, most lenders will look at a minimum of two months of bank statements. In some situations they will look for more than that. These bank statements include accounts for your checking account, savings account, and any other accounts you might have. Besides what has already been mentioned, lenders want to make sure that there hasn’t been any debts recently acquired. If you are self-employed and do not receive a W-2, lenders may ask to look at your most recent 12-24 months of bank statements.

If a lender notices a large sum of money in your account that may be used as a downpayment, your mortgage company will want you to obtain a letter from your person who gave you the money that states the money is a gift and not a loan. This is known as a gift letter. If you have receive a large amount of money and it was not for a gift, it is recommended that you wait at least sixty days (different if you are self employed) so questions will not be asked in regards to the significant amount of money.

If you have a reason to be concerned or wonder about transactions that show up on your bank statement, let us know and we would be happy to answer any questions.

For the most part, you will purchase a home with a signifiant other. However, that is not always the case and it absolutely does not have to be the only way to purchase a home with someone. You can purchase a home with a friend, a family member, or someone you are in business with. When you purchase a home with someone else, both of you will be equally responsible to make payments. On the upside, you will both be eligible for gains. Co-ownership is fairly popular in today’s society.

Going through this process is no different than a married couple (or single person) would have to go through the process. Keep in mind that it also gives rights to both people…a fifty, fifty split in decision making, responsibilities, etc.

One of the reasons people choose to do this is because your mortgage rate may be decreased and your budget to purchase a home is increased. Basically, both incomes are combined to see how much you can afford to borrow. Both debts are also combined as well.

Owning a home with someone else takes a lot of stress off of someone. Not only do you have someone to share the mortgage cost with, but you also have someone to share any maintenance, repair, or improvement costs with. It takes a lot of pressure off of you.

While there is plenty of positives to owning a home with someone, there are negatives or precautions to think about as well. For example, if your partner gets in a tough financial spot and they are unable to pay their portion of the mortgage or repairs that are needed, you will be responsible for their portion.  Sometimes it gets fishy when it comes to agreeing to maintenance work and repairs.

There is a lot to think about when it comes to making a decision on if and with who you should purchase a home with. We would highly recommend you come up with pro/con list before making your final decision.

Have you heard of a “bank statement mortgage?” If not, keep reading! A bank statement mortgage is something that is not incredibly well known as the majority of people do not go this route. If you do not earn a traditional paycheck via a W2, proving your income as a contractor or freelancer, etc. will not be as easy a “regular’ employee. The way to do this is by proving your income from showing a minimum of two years of regular deposits in your bank account.

Your income needs to be proved – this includes debts, savings, investments, etc. With being self employed, someone may have $1,000 worth of write-offs in a month which would decrease their income by $1,000 for the month. This may reduce your budget for what you can afford to purchase a home.

Bank statement loans have become more popular with an increase of people working from home and not working a traditional job. Getting a loan should not be a problem except for the fact that you will need to show one to two years worth of income while being self employed. The amount of money you receive will have to be substantial as well. A bank statement loan is not difficult to be approved for, again, as long as you are able to document regular monthly deposits.

Each situation is a little different so it will depend on the lender as far as what you qualify for and for the amount of time you have to provide bank statements for. Depending on the situation, a lender may want you to provide a profit and loss statement as well. This would be for a business owner specifically.

This type of situation may require some different requirements as well. For example, your down payment and credit score may be more than a more conventional loan.

If you would like to talk further about this, let us know. We would love to help you get approved!

We recently received some questions in regards to how to get pre-approved for a mortgage. This is especially important when it comes to coming up with a budget of what you can afford if you are looking to purchase a new home. This should truly be the first step before you fall in love with a house that you cannot afford, no matter how much you want the numbers to work. The pre-approval helps you to figure out how much you qualify for a home loan. It will include a maximum amount of money you can spend on a new home, along with your interest rate and loan terms you will likely get. The pre approval is not one hundred percent set in stone but it will be extremely close. The more information the lenders have to get you pre-approved, the more accurate everything will be. So if the lender has a very clear view on your financial status, which includes your credit score, income, etc. the maximum loan amount, interest rate, and loan terms will be more accurate.

Due to the current climate of the world, most lenders offer a pre-approval process completely online. If you would prefer to do it over the phone or in person, you do have that option as well. The more information you have available and have access to, the easier and quicker the process will be for you.

To start the pre approval process, in order for the lender to get a credit report, you will need to provide a great deal of personal information. This type of information includes your social security number, all financial information, and all loan information as well. The lender will run your credit score and credit history. You can get pre approved for as many lenders as you want as the pre approvals are not binding.

Other information that is needed will include your income and assets. You are welcome to give us a call and we will give you the exact list of documentation that will be required and expected to give. Keep in mind that while most lenders have the ability to give you an (almost) instant pre-approval, it is possible that it could take up to sixty days to complete a manual processing approval. So be sure to give yourself an adequate amount of time to get approved.

Something else to keep in mind is that there is a difference between pre-approval and pre qualified. Getting pre-qualified is very informal as you do not have to submit exact documents and nothing is specifically verified. We recommend you get pre-approved so you can have an accurate sense of your budget.

Last week we gave you some important reminders as to what to look for when it comes to purchasing a home. Last week we discussed the importance of making sure you had a budget in mind that you could afford. We also reminded you that due to the current competitive market, it may be wise to have some extra money set aside if you want to try to “out bid” someone who may be looking to purchase the same house as you. We also discussed the importance of making sure you look at the location of your potential new home and what it will mean for you; for example, how long it will take you to drive to work, to get the kids to school, etc.

The majority of people will have an idea of what they want the layout of a potential home to be. However, some people are too zoned into the short term that they forget about the long term. We would recommend you think into the future and take into consideration if you plan to add more children or pets into the family or even if in the future you may be moving an older family member into your home. It is usually less expensive to have a home that can sustain all of your wants and desires instead of having to renovate. 

Speaking of renovation, it would also be a better financial decision to find a home that has most, if not all, of the amenities you want in your home. For example, if you want a home with a particular type of tile or carpet, it would save you money to find a home that has what you want. While it should not be the complete decision maker, it would be easier on your pocket book. 

We have found that the majority of people tend to forget to look into the cost of living in a particular area. This could change from just ten minutes up the road, living in a different city or county. This is where looking into local property taxes and utility bills comes into the picture. Property tax can significantly change from one area to another. Or even if you are moving somewhere that you are required to hold flood insurance. These important aspects are often forgotten to take into consideration. This also ties into not forgetting about looking into homeowners association costs of this is something that may be applicable to you! Not only would this be an additional cost but you may have a particular upkeep or something that is not allowed that does not align with your wishes.

With all of these thoughts in mind, we would recommend you to come up with a list of what is a deal breaker to you and what is not. We do not want you to settle and a home that will not make you happy in the long run. Be sure to look at all parts of your decision making – especially if it will be a “forever home!”

In the past, we have given some points and things to look at when it comes to purchasing a house. But since the market is so hot right now we want to make sure you are reminded of a few factors to be sure you look at when it comes to purchasing a new home. Everyone has their own personal ideas and criteria when it comes to what they are looking for in a new home. You may be so hyper-focused on one criteria that you forget about something else that may be important.

To begin with, while this may seem very elementary and obvious, do not forget how important it is to have your budget planned when looking at new homes to purchase! It is very important you know what price range you are able to look at. It would be quite devastating if you find the home of your dreams only to realize it is too expensive for you. So it is important to get pre-qualified for a mortgage before you start house hunting! Since the current housing market is so competitive, you may want to include some “wiggle room” when it comes to the final price tag. It may be wise for you to be prepared to negotiate and pay more than asked if it goes into a price war with someone else.

First off, this may seem obvious as well, but make sure you take into consideration the location of the homes you are looking at. Take into consideration all of the facets of the location. For example, how long will your work commute be at this house? What do the neighbors seem like? Will it take you a long time to go to the grocery store? If you have a newborn baby, are the streets nearby full of traffic and full of noise? If this is your first home you are purchasing, you may not think of how important it is to look at everything pertaining to the location of the home…but it is so important!

Next week we will continue with our list and give you other ideas as it pertains to decision making when purchasing a new home. Is there anything else you think needs to be added to the list?

Just like anything in life, don’t take the first offer you get! This is true when it comes to refinancing your home as well. And especially true as it pertains to your current lender. We will let you in on a little secret…when it comes to lenders, it is very important that they retain their current customers. So keep in mind that your current lender may not offer you a competitive rate immediately.

When you decide to refinance, ask your current lender for the best rate possible. Be sure to do your homework and know what you will be quoted at a different lender as you will likely not be offered the same amount as a new customer would upon them initially signing up. If your current rate is 4.5% you will probably be offered 4% when you call the first time to refinance. However, a new customer may be quoted 3.5% or even 3% as a rate. Make sure you have this information in your back pocket!

We would recommend that you get a quote from a minimum of at least three lenders – maybe even three different lenders other than your current one. And by getting a quote, we would recommend you call the lender and put in all appropriate information – not sure from a piece of mail or e-mail you may have received from a company. For the most part (and this goes with post advertisements) what is advertised is more than likely the ideal situation in order to get people interested. A company needs a great deal of information from you in order to give you an accurate quote. As long as you have the proper information required, obtaining a quote will not take a great deal of time. We cannot stress enough how important it is to obtain multiple quotes – especially before making a final decision.

Also a part of your final decision should include any and all additional fees. These fees include closing cost, annual percentage rate, etc. Take all of the above into consideration when making your decision to refinance.